Stocker and feeder cattle weaken as drought persists

Demand for stocker cattle continues to weaken across the Central Plains as the ongoing drought forces cattlemen to reduce inventories and readjust business strategies.

Heavy calves at last week’s auctions were called unevenly steady to weak, with trends ranging from $2 per hundredweight higher to $3 lower. Stocker calves under 600 pounds traded steady to $3 lower. USDA Market News reports that not enough “true yearlings” were available for an adequate market test last week.

“Persistently dry conditions over the last two years have caused unprecedented liquidation of breeding stock, movement of stocker cattle into confined feeding operations, and early marketing of home-raised calves in an effort to preserve cow herds,” says USDA Market News Reporter Corbitt Wall. “Virtually no green or strictly grass feeders are available and the majority of the new-crop calves on offer are right off the cow.”

The drought affects cattle operations beyond the obvious lack of forage. Purchased calves and stocker cattle are walking off the truck in poorer condition that normal, which increases the risk of disease outbreak and the cattle’s ability to respond to treatment.

“Traditional winter backgrounders have been slow to enter the market, despite the smallest calf crop in 60 years,” Wall says. “Most believe there is still plenty of demand out there but prospective buyers are conserving their feed, water, and medicine until later in the season.”

Last week’s auction receipts totaled 291,500, compared to 265,200 the previous week and 325,200 last year. Direct sales of stocker and feeder cattle totaled 35,500 with video/Internet sales at 33,200. The weekly total was 360,200, compared to 416,800 last year.

Cash fed cattle markets traded $1 lower last week with cattle in the South at $125 to $126 per hundredweight. Cattle sold on a dressed basis $2 lower at $195. Supplies of market-ready cattle are likely to show an increase over the next few weeks, and holiday turkey demand is likely to prevent increased beef sales.

Boxed beef prices declined for the week. Choice boxed beef traded Friday at $191.37, a decline of $1.37 per hundredweight from the previous Friday. Select boxed beef declined $1.98 for the week to $173.56. The Choice-Select spread finished the week at $18.31 per hundredweight, an increase of $1.11from the previous week.

Slaughter cows and bulls sold unevenly steady. USDA's Cutter cow carcass cut-out value Friday morning was $159.96, up 19 cents from the previous Friday. Omaha cash corn was 12 cents per bushel lower for the week at $7.62 per bushel.